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Administrative exhaustion is not a jurisdictional requirement; raise it or waive it

By Lisa Milam-Perez, J.D.

Title VII’s administrative exhaustion requirement is not a jurisdictional bar to suit, the Fifth Circuit has held, noting the circuit’s discordant case law on the question and citing the rule of orderliness to choose the line of precedent which finds exhaustion is merely a prudential prerequisite. Consequently, a county employer facing a Title VII action forfeited its exhaustion defense by not timely raising it, so a district court erred in disposing of the employee’s claim on exhaustion grounds. Reviving her suit for a second time, the appeals court reversed summary judgment and remanded (Davis v. Fort Bend County, June 20, 2018, Elrod, J.).

Underlying claims. An IT supervisor filed a formal complaint with human resources alleging that the director of IT had sexually harassed and assaulted her. Her complaint led to an investigation and the IT director’s resignation. It also caused the employee’s direct supervisor—a close friend of the former director—to retaliate against her for having reported the misconduct. Specifically, he refused to approve her request to take a Sunday off to attend a special church service, and then fired her when she attended the service anyway, and didn’t report to work. She filed claims of religious discrimination and retaliation, which the district court dismissed on summary judgment.

Procedural background. In her first appeal, the Fifth Circuit revived the discrimination claim, finding genuine issues of fact remained (but it affirmed summary judgment on the retaliation claim). On remand, the county then argued for the first time that the employee had failed to exhaust her administrative remedies on the religious discrimination claim. Finding that administrative exhaustion is a jurisdictional prerequisite in Title VII cases, the district court deemed it “irrelevant” that the county had only now raised this defense, and dismissed the employee’s claim with prejudice.

Bringing a second appeal, the employee argued that under Title VII, failure to exhaust administrative remedies is not a jurisdictional bar; rather, exhaustion is only a prudential prerequisite for suit, and the county had waived its exhaustion argument.

No jurisdictional bar. The Fifth Circuit pointed to its line of precedent that characterizes Title VII’s administrative exhaustion requirement as jurisdictional, and a competing thread of cases that treats the exhaustion requirement as merely a prerequisite to suit (and a third group of cases that simply point out the intra-circuit split, then dodge the issue). Citing the rule of orderliness, which precludes one appellate panel from overturning the decision of another panel, the appeals court held that its second line of cases, which follows its 1989 decision in Womble v. Bhangu, controls. In that case, the appeals court ruled that a Title VII plaintiff’s failure to exhaust her administrative remedies is not a jurisdictional bar but rather a prudential prerequisite to suit.

The competing thread, which follows Tolbert v. United States (a 1990 holding that administrative exhaustion is a jurisdictional requirement) can’t be squared with the Supreme Court’s reasoning in its 2006 decision in Arbaughv. Y&H Corp., the appeals court concluded. In that case, which held that Title VII’s statutory coverage limitation to employers with 15 or more employees is not jurisdictional, the High Court offered a “bright line” for deciding whether a statutory requirement is jurisdictional: whether or not Congress clearly says so. And, as for administrative exhaustion, Congress did not clearly state this Title VII requirement was jurisdictional. As such, “we must treat this requirement as nonjurisdictional in character,” the Fifth Circuit concluded, reaffirming its holding in Womble. This conclusion is consistent with the First, Second, Sixth, Seventh, Eighth, Ninth, and D.C. Circuits, the appeals court pointed out.

Employer waived the defense. “Just because Title VII’s administrative exhaustion requirement is not jurisdictional does not mean that this requirement should be ignored,” the court observed, moving to the next stage of the inquiry in this case. The failure to exhaust can foreclose a Title VII suit, but this is an affirmative defense that must be pleaded, and the county never did so in the district court, either in answering the complaint, or in its original motion for summary judgment, or in it briefing or oral argument in its first go-round at the Fifth Circuit. Nor did it raise the issue in its petition for rehearing en banc or in its unsuccessful certiorari petition to the Supreme Court.

“Simply put, Fort Bend waited five years and an entire round of appeals all the way to the Supreme Court before it argued that Davis failed to exhaust,” the appeals court pointed out. As such, it was “abundantly clear” that the employer forfeited its opportunity to assert that the employee failed to exhaust her administrative remedies. The lower court thus erred in dismissing the case on these grounds.